Air New Zealand announces millions of domestic fares under $100 after record profit

Air New Zealand will offer millions of fares for under $100 for travel around New Zealand next year, after posting its second highest ever profit today.

The airline announced the record profit of $540 million before taxation for the 2018 financial year yesterday, with plans to invest approximately $150 million to enhance customer experience in key areas, including new cabin experiences, digital products and lounges.

Air New Zealand has pledged to offer more cheap fares over the next year, as domestic jet capacity grows by three to five per cent and regional turboprop capacity grows by five to seven per cent.

"One of the benefits of a growing Air New Zealand is more opportunities than ever for Kiwis to snap up a bargain. In 2019, we will offer more than 2.9 million seats for travel in New Zealand for under $100," Air New Zealand CEO Christopher Luxon said.

Luxon also acknowledged the impact of external disruptions on the airline's operational performance and thanked both customers and staff for their loyalty and support.

"While we are very proud of the financial achievements of the 2018 financial year, I want to acknowledge the patience and loyalty of our customers who have been impacted by operational disruptions while travelling with us this year. These disruptions have resulted in a level of service for some that did not meet the high standards we set for ourselves," he said.

"We do not take our customers' choice to fly with Air New Zealand for granted and remain focused on making improvements across all touch points of their travel journey,"

This year will also see the launch of new direct services to Chicago and Taipei commencing in November, new services to Brisbane from both Wellington and Queenstown beginning in December, as well as a new third daily service added to the Auckland-Singapore route in partnership with Singapore Airlines.

Air New Zealand chief executive Christopher Luxon. Photo / Greg Bowker

The airline also expects to receive 10 new Airbus A320/321 NEO aircraft, to continue growth and cost benefits to the Tasman and Pacific Islands networks – and Air New Zealand will be the first to fly the Airbus NEO in Australasia. Two Boeing 787-9 aircraft with increased premium cabin space and next generation Rolls-Royce TEN engines will also join the fleet.

Anticipating further domestic growth, Air New Zealand also announced it would acquire seven Airbus A321 NEO aircraft, with phased delivery expected from 2020 to 2024. The aircraft comes equipped with new generation engines and approximately 25 per cent more seats. The A321 NEOs are expected expected to deliver fuel savings and efficiencies of up to 15 per cent compared to the airline's existing A320 domestic aircraft, helping to reduce carbon emissions.

Luxon said the airline expected passenger growth to continue with strong forward bookings heading into the peak summer season.

"Looking out over the next two years, the airline is expecting to grow by one million customers a year, reaching 19 million customers by the end of 2020," he said.